OREANDA-NEWS. May 25, 2012. China Development Bank (CDB) released its 2011 annual report. It netted a profit of Rmb60,865 million, up by 17.2% year-on-year. Its total assets amounted to Rmb6.3 trillion, up 22.3%, including Rmb5.5 trillion outstanding loans. While the amount of non-performing loans (NPL) shrank, the NPL ratio also dropped.

In the context of China’s ambition to transition to a more balanced growth model as outlined in its 12th Five-Year Plan (2011-2015), CDB’s solid performance of 2011 highlighted its crucial role as a development finance institution in service of the national economy.

Financing the Real Sector Growth

“As our mission is to implement national macroeconomic policy and assist in the development of a robust economy. We continue to leverage our strengths in medium- to long-term financing by concentrating lending and investment in infrastructure, basic industry, and strategic sectors.”

-- Chairman’s Review of CDB Annual Report 2011

Key Sector Loans--In 2011, CDB lent Rmb429.4 billion to key national projects in sectors such as railway, road, electric power and water resources. New loans to water management projects alone amounted to Rmb30.7 billion, including lending to the South-to-North Water Diversion, a national priority mega utility project.

Regional Development--New loans to Central and Western China totalled Rmb360.5 billion, representing 53% of the total loan portfolio; Rmb72.8 billion, or 11% to old industrial bases such as those in Northeast China. New loans to Tibet and Tibetan-inhabited areas in four other provinces totalled Rmb24.8 billion, while those to Xinjiang Rmb35.2 billion, topping all financial institutions in China. CDB’s robust support to these regions contributed to a more balanced development of Eastern, Central and Western China.

Cultural Financing--CDB capitalized on its medium to long-term financing strengths and innovated financing models for the cultural industry. By working more closely with the Ministry of Culture and the General Administration of Press and Publication as well as local authorities in developing “cultural infrastructure”, it supported an “industry chain” of the cultural sector integrating creation, production and circulation, and the expansion efforts of key players — including the merger transaction of North Media, the integration of TV and broadcast networks of TIK, and the construction of Fantawild Culture and Technology Park. As of the end of 2011, the Bank‘s loan exposure to the cultural industry was Rmb120.4 billion, making it the leading lender to this sector.

Strategic Planning--CDB’s planning services played a prominent role in its business development. It further engaged itself with central and local government bodies in planning programs to formulate strategies and financing schemes for 11 major national plans such as the Rustbelt Rejuvenation in Northeast China, as well as 14 projects such as the Beijing Economic Circle.

Building Community Wellbeing

CDB has been dedicated to building a universal financial system accessible to all, addressing financing challenges in social development.

Low-income Housing--In 2011, new loans for low-income housing amounted to Rmb109.5 billion, or a 63% market share, making it the leader in this segment.

SME Financing-- In 2011, new loans to SMEs grew 24.8% year-on-year to Rmb309.1 billion.

Student Loans--In 2011, the Bank’s student loan program disbursed Rmb10.4 billion to support more students in need: 1.87 million students as beneficiaries in total and 80% of the market share.

Managing Risks

Growth in asset size puts any bank’s risk management capabilities to test, as in CDB’s case. In 2011, CDB refined its risk management system, adopted enterprise-wide risk management planning, and developed a detailed plan for establishing an integrated and specialized risk management system that is comparable with any leading system in the industry. The risk plan has been incorporated and implemented in the bank-wide process. These concerted actions effectively boosted its overall risk management capabilities and service levels, as well reflected by the Bank’s NPL ratio of 0.4% (2011 year-end)--a ratio managed under 1% for 27 consecutive quarters.

Looking ahead into 2012, CDB Chairman Chen Yuan reiterated the Bank’s commitment to contributing to sustainable economic and social progress and exploring new opportunities for inclusive and resilient development as a pioneering development finance institute.